Welcome to the Entertainment Strategy Guy Newsletter! My favorite reads, listens, socials and more on the business of entertainment, with the links to my recent writings.
In the last couple of weeks of August, the theme of entertainment has clearly been, “antitrust”. Some restrictions are being relaxed (Paramount Consent Decrees), while others are under threat (Apple v Fortnite). This could have big impacts on the future of strategy in the entertainment business.
(If this email was forwarded to you, sign up to receive all future emails or follow me on Twitter, Linked-In or at my website.
The Best of the Entertainment Strategy Guy
“Is Antitrust the New Deregulation?: The Strategic Implications of Ending the Paramount Consent Decrees…and What Comes Next” at my website.
Here’s my first article on antitrust. Over the last 40 or so years, there have been fewer and restrictions on the behavior of firms, with the latest casualty being the Paramount Consent Decrees that kept studios from owning theaters. Government regulation isn’t exciting, buzzy or sexy, but it can have just as much impact on the behavior of firms. I dig into why the government ended this regulation and the potential ramifications for future strategy.
“Who Will Win the Battle for the next ‘Game of Thrones’? : Where We’ve Been” at my website.
I’m almost finished with “catch up July”, where I restarted some big series that I’d neglected over the last few months. Chief among them was my quest to ask, “Which series will be the next ‘Game of Thrones’” since everyone from Amazon to HBO to Netflix is looking for it. In this primer, I catch up on all the “fantasy TV” news since last summer and explain what I’ve written about so far.
“Visual of the Week: The Biggest Broadway Musicals of the 2010s” at my website.
Given that Hamilton won July, just how big was its live musical predecessor? It turns out, it was pretty clearly the most popular musical of the 2010s, which I made my “visual of the week”.
“Most Important Story of the Week: What Comes Next As The Paramount Consent Decrees End?” at my website.
Drawing on my read of the future of antitrust enforcement in the U.S.—which depends a lot on who wins in November and whether or not they change current antitrust policy—I speculate about what happens next in the ownership of theaters. Frankly, given that there are only a small number of theater chains now, I think they’ll inevitably be snapped up by either the studios or tech giants. Read about that plus Sumner Redstone passing, AT&T and Crunchyroll, BBC numbers and more.
“Most Important Story of the Week: The Apple/SuperCBS Bundle Arrives” at my website.
Bundles are good deals for both customers and companies, hence right as things are “unbundling” in TV, we’ll see them bundle right back up again. Disney started the latest bundling trend, but now Apple is getting in on the game. I explain the logic and run through some back-of-the-envelope math for the Apple/SuperCBS bundle in my latest column. That plus Fortnite v Apple (the other big antitrust story, more to come on this from me in September), theater re-openings, Amazon “doubling” in video and more.
Twitter Threads
My big thread of the last two weeks was on AT&T and the “Prime Scenario”.
The Best Content of the Last Two Weeks
(These are the best reads, listens, newsletters, or social conversations I came across last week.)
Long Read of the Week - “Disney’s ‘Mulan’ Gamble: How Much Can It Make By Skipping Theaters?” By Adam B. Vary in Variety
When the “Mulan to Disney+ exclusive” plan was announced, I was skeptical Disney would ever make as much money as theatrical release in olden times. However, I didn’t make a model to actually judge which factors would have the biggest sway. Vary does that back of the envelope math here. (It’s the type of article I wish the trades wrote more often.) At the end to the day, the “magic number” here is whether or not Disney can get more than about 15% of its Disney+ viewers to buy Mulan when it debuts. I’m skeptical they can (many customers will wait 6-12 weeks for it to be free; it’s really not as kid friendly as other blockbusters), but I appreciate the well-argued opinion on the other side.
Other Long Read - “How Sumner Redstone Really Made His Fortune” by Gideon Yago in Vanity Fair
Throw “union busting”, “freelancers”, and “busting myths” into one article and I’m in. Have it overturn narratives about a recently deceased media mogul and I’m even more in. Yago describes a neglected part of the story about Sumner Redstone: he pioneered cost reductions by simply refusing to follow established government laws and regulations. If you say “content is king”, that implies making better content leads to higher “willingness to pay” by customers. Instead, Redstone just paid his employees less, which was a cost-cutting strategy.
(Plus, I didn’t know Redstone allegedly coined “content is king”, which I wrote an essay about last fall.)
Other Long Read - “Behind Hollywood's Executive Ousters: "It's the Great Reckoning Now” by Lesley Goldberg and Kim Masters
It’s tough to find two trade reporters better than these two, so them teaming up to try to explain all the executive reorganization at Warner Media and NBC-Universal was probably destined to make my newsletter. The cynic in me would note that even with the new structures, the conglomerates still have overly complicated/unwieldy org charts.
Non-Entertainment Read - “Will Craft Brewing Survive?” By James Fallows in The Atlantic
No one loves craft beer more than the EntStrategyGuy. This great article by Fallows discusses the underlying economics of distilleries I didn’t know. It also ties back to the theme of the month, since government regulation—this time in mandating beer makers use beer wholesalers—can change the economics of an industry. While there are many beer producers, there are usually local monopolies in distribution. In this case that structure likely takes value from the beer manufacturers, doing most of the work, and giving it to wholesalers, who charge artificially high fees.
Listen of the Week - Malcolm Gladwell’s Revisionist History on “Hiring Nihilism”
Each season of Malcolm Gladwell’s podcast has had a few good episodes about business or management, and the latest season is no different. In particular, Gladwell is in the middle of a series of episodes about “hiring nihilism” or the idea that traditional methods of hiring—think interviews, grant committees or even elections—aren’t good at identifying who to hire. I’m not a nihilist myself—I’m a hiring agnostic—but this is still worth a listen if you do any hiring.
Twitter Threads
Brandon Brady says don’t make your sign-up process an IQ test if you’re HBO Max. Amen!
(Feel free to share this free newsletter to any and everyone you want. It helps spread the word.)
(If this email was forwarded to you, and you’re wondering who I am, The Entertainment Strategy Guy writes under this pseudonym at his eponymous website. A former exec at a streaming company, he prefers writing to sending emails/attending meetings, so he launched his own website. You can follow him on Twitter or Linked-In for regular thoughts and analysis on the business, strategy and economics of the media and entertainment industry.)